75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1939
A-Engrossed
House Bill 3004
Ordered by the House April 30
Including House Amendments dated April 30
Sponsored by Representative CLEM (at the request of Jane Cummins)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Provides that sale by trustee of foreclosed property or sale of
residential property after judicial foreclosure precludes further
action against mortgagor or grantor for deficiencies in amount
secured by mortgage or trust deed. { + Creates exceptions. + }
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to sales of foreclosed property; creating new
provisions; amending ORS 86.770 and 88.070; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon: + }
SECTION 1. ORS 86.770 is amended to read:
86.770. { - (1) A sale made by a trustee under ORS 86.705 to
86.795 shall foreclose and terminate all interest in the property
covered by the trust deed of all persons to whom notice is given
under ORS 86.740 and 86.750 and of any other person claiming by,
through or under such persons, and such persons shall have no
right to redeem the property from the purchaser at the trustee's
sale. The failure to give notice to any of these persons shall
not affect the validity of the sale as to persons so
notified. - }
{ - (2) Except as provided in subsection (4) of this section,
no other or further action shall be brought, nor judgment entered
for any deficiency, against the grantor, or the grantor's
successor in interest, if any, on the note, bond, or other
obligation secured by the trust deed or against any other person
obligated on such note, bond or other obligation after a sale is
made: - }
{ - (a) By a trustee under ORS 86.705 to 86.795; or - }
{ - (b) Under a judicial foreclosure of a residential trust
deed. - }
{ - (3) Notwithstanding ORS 88.070, when there is a judicial
foreclosure of a trust deed that is not a residential trust deed,
the judgment shall provide that if the sale proceeds are
insufficient to satisfy the judgment, execution may issue for any
amount by which the unpaid balance of the obligation secured by
the trust deed exceeds the net sale proceeds payable to the
beneficiary. - }
{ - (4) Nothing in this section shall preclude an action
judicially or nonjudicially foreclosing the same trust deed as to
any other property covered thereby, or any other trust deeds,
mortgages, security agreements, or other consensual or
nonconsensual security interest or liens covering any other real
or personal property security for the note, bond or other
obligation secured by the trust deed under which a sale has been
made or an action against a guarantor to the extent of any
remaining deficiency following judicial foreclosure. A guarantor
of an obligation secured by a residential trust deed shall not
have the right to recover any deficiency from the grantor or any
successor in interest of the grantor. - }
{ + (1) If, under ORS 86.705 to 86.795, a trustee sells
property covered by a trust deed, the trustee's sale forecloses
and terminates the interest in the property that belongs to a
person entitled to notice of the sale under ORS 86.740 and 86.750
or to a person that claims an interest by, through or under the
person entitled to notice. A person whose interest the trustee's
sale foreclosed and terminated may not redeem the property from
the purchaser at the trustee's sale. A failure to give notice to
a person entitled to notice does not affect the validity of the
sale as to persons that were notified.
(2) Except as provided in subsection (4) of this section, after
a trustee's sale under ORS 86.705 to 86.795 or after a judicial
foreclosure of a residential trust deed, an action may not be
brought or a judgment entered for a deficiency against the
grantor, the grantor's successor in interest or another person
obligated on the note, bond or other obligation secured by the
residential trust deed.
(3) Notwithstanding ORS 88.070, in a judicial foreclosure of a
trust deed that is not a residential trust deed the judgment must
provide that if the sale proceeds are insufficient to satisfy the
judgment, execution may issue for the amount by which the unpaid
balance of the obligation secured by the trust deed exceeds the
net sale proceeds payable to the beneficiary.
(4) This section does not preclude:
(a) An action that forecloses, judicially or nonjudicially:
(A) Other property covered by the trust deed that is the
subject of the foreclosure; or
(B) Another trust deed, mortgage, security agreement,
consensual or nonconsensual security interest or lien that covers
other real or personal property that is also used as security for
the note, bond or other obligation that is secured by the trust
deed for the property that was sold.
(b) An action against a guarantor for a deficiency that remains
after a judicial foreclosure.
(c) An action for a deficiency that remains after a trustee's
sale or a judicial foreclosure of a residential trust deed, if
the person that brings the action or an affiliate of the person
that brings the action:
(A) Does not foreclose on the residential trust deed,
judicially or nonjudicially;
(B) Does not receive proceeds from the trustee's sale; and
(C) Is not the trustee or beneficiary in the residential trust
deed that is the subject of the foreclosure.
(5) A guarantor of an obligation secured by a residential trust
deed may not recover a deficiency from the grantor or a successor
in interest of the grantor.
(6) As used in subsection (4) of this section, 'affiliate '
means a person that controls, is controlled by or is under common
control with the person that brings an action under subsection
(4)(c) of this section. + }
SECTION 2. ORS 88.070 is amended to read:
88.070. When real property is sold pursuant to a judgment
foreclosing a mortgage { + that was given to secure an unpaid
portion of the purchase price of the real property + } and the
proceeds of the sale are not adequate to satisfy the amounts
secured by the mortgage, all judgment remedies for collection of
the unsatisfied amounts expire when the sale is made { + . + }
{ - if: - }
{ - (1) The mortgage was given to a seller to secure the
unpaid balance of the purchase price of real property; or - }
{ - (2) The mortgage was given after September 13, 1975, to a
person other than a seller to secure not more than $50,000 of the
unpaid balance of the purchase price of real property used by the
purchaser as the primary or secondary single family residence of
the purchaser. - }
SECTION 3. { + The amendments to ORS 86.770 and 88.070 by
sections 1 and 2 of this 2009 Act apply to mortgages given or
trust deeds executed on or after the effective date of this 2009
Act. + }
SECTION 4. { + This 2009 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2009 Act takes effect on its
passage. + }
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